Banking giants join Swift’s blockchain project

Collaboration will explore way of using distributed ledger technology to improve the way banks' overseas accounts are reconciled

By

Clare Dickinson

April 25, 2017 12:14 p.m. GMT

Swift, the provider of financial messaging systems and payments services, has teamed up with some of the world's largest transaction banks for the next stage of its project to develop a way of using blockchain to help banks monitor their overseas accounts.

It has now revealed the names of some of the banks it is working with on the project, which is at the "proof of concept" stage. They are: ANZ Banking Group, BNP Paribas, BNY Mellon, DBS Bank, RBC Royal Bank and Wells Fargo.

Another 20 banks will join the project at a later stage, it said in a statement today, and results of its tests will be presented at the Sibos conference, an annual financial technology and investor-services gathering, in Toronto in October.

Swift will use Hyperledger, an open-source platform for distributed ledger technology, alongside its own technology to explore whether blockchain can be used to reconcile the foreign-exchange accounts in real time, lowering costs and operational risks.

Currently, banks rely on debit and credit updates and end-of-day statements to monitor their overseas accounts.

Damien Vanderveken, who works in research and development at Swift, said in a statement: "We are very excited to start the [distributed ledger] proof of concept with these participating banks. This is a great step forward and another example of how Swift and the industry can work together to solve concrete business challenges."

The collaboration is a further example of banks and tech providers working on blockchain projects aimed at making finance's plumbing run more smoothly.

Norton Rose Fulbright, a law fim, and R3, a consortium of financial services firms, published a report today on how the technology can be used in the insurance sector.

They believe it could be a useful tool to help the industry reconcile and verify the multiple records that are created as market participants share and transact on vast quantities of data.